IMPORTANT NOTICE NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S.

Transcription

1 IMPORTANT NOTICE NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S. IMPORTANT: You must read the following before continuing. The following applies to the prospectus attached to this electronic transmission and you are therefore advised to read this carefully before reading, accessing or making any other use of the prospectus. In assessing the prospectus, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from us as a result of such access. NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE SECURITIES OF THE ISSUER. THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT) AND MAY NOT BE OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY INTO THE UNITED STATES OR TO ANY U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOLLOWING PROSPECTUS MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER, AND IN PARTICULAR, MAY NOT BE FORWARDED TO ANY U.S. PERSON OR TO ANY U.S. ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. This prospectus has been delivered to you on the basis that you are a person into whose possession this prospectus may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located. By accessing the prospectus, you shall be deemed to have confirmed and represented to us that (a) you have understood and agree to the terms set out herein, (b) you consent to delivery of the prospectus by electronic transmission, (c) you are not a U.S. person (within the meaning of Regulation S under the Securities Act) or acting for the account or benefit of a U.S. person and the electronic mail address that you have given to us and to which this has been delivered is not located in the United States, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands) or the District of Columbia, (d) you have not duplicated, distributed, forwarded, transferred or otherwise transmitted this document or any other presentational or other materials concerning this offering (including electronic copies thereof) to any persons within the United States and agree that such materials shall not be duplicated, distributed, forwarded, transferred or otherwise transmitted by you, (e) you have made your own assessment concerning the relevant tax, legal and other economic consideration relevant to an investment in the Notes and (f) if you are a person in the United Kingdom, then you are a person who (i) has professional experience in matters relating to investments or (ii) is a high net worth entity falling within Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order This prospectus has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently none of CELTIC RESIDENTIAL IRISH MORTGAGE SECURITISATION NO. 12 LIMITED nor THE ROYAL BANK OF SCOTLAND PLC (nor any person who controls it nor any director, officer, employee nor agent of it or affiliate of any such person) accepts any liability or responsibility whatsoever in respect of any difference between the prospectus distributed to you in electronic format and the hard copy version available to you on request from CELTIC RESIDENTIAL IRISH MORTGAGE SECURITISATION NO. 12 LIMITED or THE ROYAL BANK OF SCOTLAND PLC.

2 PROSPECTUS DATED 27 JUNE 2007 Celtic Residential Irish Mortgage Securitisation No. 12 Limited (incorporated in Ireland with limited liability under registered number ) A325,065,000 Class A1 Mortgage Backed Floating Rate Notes due 2049 A487,500,000 Class A2 Mortgage Backed Floating Rate Notes due 2049 A1,010,685,000 Class A3 Mortgage Backed Floating Rate Notes due 2049 A39,000,000 Class B Mortgage Backed Floating Rate Notes due 2049 A87,750,000 Class C Mortgage Backed Floating Rate Notes due 2049 Issue Prices: 100% This Prospectus constitutes a prospectus for the purposes of Directive 2003/71/EC (the Prospectus Directive). Application has been made to the Irish Financial Services Regulatory Authority (the Financial Regulator), as competent authority under the Prospectus Directive, for the Prospectus to be approved. Application has been made to The Irish Stock Exchange Limited (the Irish Stock Exchange) for A325,065,000 Class A1 Mortgage Backed Floating Rate Notes due 2049 (the Class A1 Notes), A487,500,000 Class A2 Mortgage Backed Floating Rate Notes due 2049 (the Class A2 Notes), A1,010,685,000 Class A3 Mortgage Backed Floating Rate Notes due 2049 (the Class A3 Notes and, together with the Class A1 Notes and the Class A2 Notes, the Class A Notes), A39,000,000 Class B Mortgage Backed Floating Rate Notes due 2049 (the Class B Notes) and A87,750,000 Class C Mortgage Backed Floating Rate Notes due 2049 (the Class C Notes and, together with the Class A Notes and Class B Notes, the Notes) to be issued by Celtic Residential Irish Mortgage Securitisation No. 12 Limited (the Issuer) to be admitted to the Official List of the Irish Stock Exchange and to trade on its regulated market. The Notes of each class will initially be represented by a temporary global note in bearer form (each a Temporary Global Note), which will be delivered to a common safekeeper (the Common Safekeeper) for Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg) on 28 June 2007 (or such later date as may be agreed between the Issuer and The Royal Bank of Scotland plc (as Manager), the Closing Date). Each Temporary Global Note will be exchangeable not earlier than 40 days after the Closing Date (and upon certification of non-us beneficial ownership) for interests in a permanent global note representing the Notes of the relevant class (each a Permanent Global Note and, together with each Temporary Global Note, the Global Notes), each in bearer form which will also be deposited with the Common Safekeeper. Save in certain limited circumstances, Notes in definitive form will not be issued in exchange for the Global Notes. Interest on the Notes will accrue from the Closing Date and will be payable quarterly in arrear on the eighteenth day of March, June, September and December in each year, subject to adjustment for non-business Days (each, an Interest Payment Date), commencing in September The Notes will bear interest at an annual rate equal to the European Interbank Offered Rate (EURIBOR) for three month deposits in euro (as determined in accordance with Condition 4, Note EURIBOR). In respect of the first Interest Period, the applicable period for determination of EURIBOR will be the linear interpolation of the applicable rate for two and three month deposits in euro plus, in each case, a margin which will differ for each class of Notes. The margins applicable to each class of Notes, and the periods for which such margins apply, will be as set out below: Class A1 Notes: Class A2 Notes Class A3 Notes Class B Notes Class C Notes 0.05% per annum up to (but excluding) the Interest Payment Date falling in June 2012 (the Step-Up Date) and thereafter a margin of 0.10% per annum. 0.08% per annum up to (but excluding) the Step-Up Date and thereafter a margin of 0.16% per annum. 0.10% per annum up to (but excluding) the Step-Up Date and thereafter a margin of 0.20% per annum. 0.16% per annum up to (but excluding) the Step-Up Date and thereafter a margin of 0.32% per annum. 0.50% per annum up to (but excluding) the Step-Up Date and thereafter a margin of 1.00% per annum. The Notes will mature on the Interest Payment Date falling in March 2049 unless previously redeemed. The Notes will be subject to mandatory partial redemption and optional redemption in whole before such date in the specific circumstances, and subject to the conditions, described in the terms and conditions of the Notes (the Conditions) set out below. The Notes will all be constituted by the same trust deed and share in the same security but the Class A Notes will rank in priority to the Class B Notes and the Class C Notes in point of payment of interest and principal on enforcement of the security, the Class B Notes will rank in priority to the Class C Notes in point of payment of interest and principal on enforcement of the security. Each class of Notes will rank pari passu and rateably without preference or priority among themselves on enforcement of the security. If any withholding tax is applicable to the Notes, payments of interest on and principal of the Notes will be made subject to such withholding tax. The Issuer will not be obliged to pay additional amounts as a consequence. The Notes will be obligations of the Issuer only and will not be guaranteed by, or be the responsibility of any other person. The Notes will not be obligations of, and will not be guaranteed by, the Note Trustee, the Security Trustee, the Managers, the GIC Provider, the Swap Counterparty, the Cap Provider, the Servicer, the Agent Bank, the Paying Agents, First Active p.l.c (First Active, in any capacity), or any company in the same group of companies as, or affiliated to, First Active. The issue proceeds of the Notes will be used by the Issuer to purchase the loans and their related security from First Active and certain refinanced loans from the Refinancing Sellers (as such term is defined herein). It is expected that the Class A Notes will, when issued, be assigned an AAA rating by Standard & Poor s Rating Group, a division of The McGraw-Hill Companies, Inc. (S&P), and an Aaa rating by Moody s Investors Service Limited (Moody s and, together with S&P, the Rating Agencies). It is expected that the Class B Notes will, when issued, be assigned an AA rating by S&P and an Aa3 rating by Moody s. It is expected that the Class C Notes will, when issued, be assigned an BBB rating by S&P and an Baa2 rating by Moody s. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. Particular attention is drawn to the section herein entitled Risk Factors below. Sole Arranger and Lead Manager The Royal Bank of Scotland Co-Managers BayernLB BNP PARIBAS CAJA MADRID Danske Bank DZ BANK AG ING Wholesale Banking MEDIOBANCA S.p.A. MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC NATIXIS OKO Bank

3 The Issuer accepts responsibility for the information contained in this document (other than the information referred to in the following two paragraphs). To the best of the knowledge and belief of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. The Issuer accepts responsibility accordingly. First Active has provided the descriptions under the headings First Active and The Loans and accepts responsibility for the information contained in these sections accordingly. To the best of the knowledge and belief of First Active, the information contained in these sections is in accordance with the facts and does not omit anything likely to affect the import of such information. First Active has, however, not been involved in the preparation of, and does not accept responsibility for, this document as a whole. The Royal Bank of Scotland plc (RBS) has provided the description under the heading The Swap Counterparty and Cap Provider and accepts responsibility for the information contained in that section accordingly. To the best of the knowledge and belief of RBS, the information contained in this section is in accordance with the facts and does not omit anything likely to affect the import of such information. RBS has, however, not been involved in the preparation of, and does not accept responsibility for this document as a whole. No person is authorised in connection with the issue and sale of the Notes to give any information or to make any representation not contained in this document and any such information or representation not contained herein must not be relied upon as having been authorised by the Issuer, First Active or the Managers. Neither the delivery of this document nor any offer, sale or solicitation made in connection with the offering of the Notes shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer, First Active or RBS or the information contained herein since the date hereof or that the information contained herein is correct at any time subsequent to the date hereof. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act), and may not be offered, sold or delivered within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Notes are also subject to United States tax law requirements. Other than the approval by the Financial Regulator of this Prospectus as a prospectus in accordance with the requirements of the Prospectus Directive and relevant implementing measures in Ireland, application having been made for the Notes to be admitted to the Official List of the Irish Stock Exchange and to trading on the regulated market of the Irish Stock Exchange and the filing of this Prospectus as a prospectus with the Companies Registration Office in Ireland, no action has been or will be taken to permit a public offering of the Notes or the distribution of this Prospectus in any jurisdiction where action for that purpose is required. The distribution of this Prospectus and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus (or any part hereof) comes are required by the Issuer and the Managers to inform themselves about, and to observe, any such restrictions. Neither this Prospectus nor any part hereof constitutes an offer of, or an invitation by or on behalf of the Issuer or the Managers to subscribe for or purchase any of, the Notes and neither this Prospectus, nor any part hereof, may be used for or in connection with an offer to, or solicitation by, any person in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. For a further description of certain restrictions on offers and sales of the Notes and distribution of this Prospectus (or any part hereof) see Subscription and Sale below. Neither this document nor any part hereof constitutes an offer of or an invitation by, or on behalf of the Issuer or the Managers to subscribe for or purchase any of the Notes and neither this document nor any part hereof may be used for or in connection with an offer to, or solicitation by, any person in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or is unlawful. References in this document to C and euro are to the lawful currency of the member states of the European Union that have adopted the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union. Any website incorporated herein by reference does not form part of this Prospectus. 2

4 IN CONNECTION WITH THE ISSUE OF THE NOTES, THE ROYAL BANK OF SCOTLAND PLC (THE STABILISATION MANAGER) (OR PERSONS ACTING ON ITS BEHALF) MAY OVER-ALLOT NOTES (PROVIDED THAT THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTES ALLOCATED DOES NOT EXCEED 105% OF THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTES) OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILISATION MANAGER (OR PERSONS ACTING ON BEHALF OF A STABILISATION MANAGER) WILL UNDERTAKE ANY STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE FINAL TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE CLOSING DATE AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES. ANY STABILISATION ACTION COMMENCED WILL BE CARRIED OUT IN ACCORDANCE WITH APPLICABLE LAWS AND REGULATIONS. 3

5 TABLE OF CONTENTS Transaction Summary Structure Diagram Summary Information Summary of Terms and Conditions of the Notes Risk Factors Credit Structure Cashflows The Loans Characteristics of the Provisional Loan Pool as at 28 February Mortgage Management The Issuer Use of Proceeds First Active Summary Audited, Consolidated Financial Information in Respect of the First Active Group 82 Ulster Bank Group Corporate Structure The Swap Counterparty and Cap Provider Expected Average Life of the Notes and Assumptions Terms and Conditions of the Notes Taxation Subscription and Sale General Information Index of Defined Terms

6 TRANSACTION SUMMARY The following information and the transaction diagram on the following page merely provide a brief overview of certain key features of the Notes and are qualified in their entirety by the more detailed information appearing elsewhere in this Prospectus. Class of Notes: Initial Principal Amount Outstanding Percentage of Class A1 A325,065, % Class A2 A487,500, % Class A3 A1,010,685, % Class B A39,000, % Class C A87,750, % Issuer: Celtic Residential Irish Mortgage Securitisation No. 12 Limited Originator/Seller/Servicer: First Active Refinancing Sellers: Celtic Residential Irish Mortgage Securitisation No. 3 p.l.c., Celtic Residential Irish Mortgage Securitisation No. 4 p.l.c., Celtic Residential Irish Mortgage Securitisation No. 5 p.l.c. and Celtic Residential Irish Mortgage Securitisation No. 6 p.l.c. Trustee/Security Trustee: Deutsche Trustee Company Limited Principal Paying Agent: Deutsche Bank AG, London branch GIC/Bank Account Provider: Ulster Bank Ireland Limited Swap Counterparty and Cap The Royal Bank of Scotland plc Provider: Corporate Services Provider Deutsche International Corporate Services (Ireland) Limited The primary assets of the Issuer securing payments under the Notes are owner-occupied Irish residential loans owned and originated by First Active. 5

7 Class of Notes A1 A2 A3 B C Listing: The Official List of the Irish Stock Exchange Governing Law: English Bloomberg Ticker: 5CRSM MT4 5GO4 Anticipated Ratings: AAA/Aaa AAA/Aaa AAA/Aaa AA/Aa3 BBB/Baa2 Rating Agencies: S&P/Moody s Credit Enhancement Subordination of the Class B and C Notes, Reserve Fund, Excess Spread Subordination of the Class B and C Notes, Reserve Fund, Excess Spread Subordination of the Class B and C Notes, Reserve Fund, Excess Spread Subordination of the Class C, Reserve Fund, Excess Spread Reserve Fund, Excess Spread Interest Rate: NE % per annum or % p.a. after the Step-Up Date NE % per annum or % p.a. after the Step-Up Date NE % per annum or % p.a. after the Step Up Date NE % per annum or % p.a. after the Step-Up Date NE % per annum or % p.a. after the Step-Up Date Interest Accrued Method: Actual/360 Actual/360 Actual/360 Actual/360 Actual/360 Interest Payment Dates: The 18th day of March, June, September and December in each year The 18th day of March, June, September and December in each year The 18th day of March, June, September and December in each year The 18th day of March, June, September and December in each year The 18th day of March, June, September and December in each year First Interest Payment Date: 18 September September September September September 2007 Step-Up Date: 18 June June June June June 2012 Final Maturity Date: 18 March March March March March 2049 Clearance/Settlement: Euroclear/ Clearstream, Luxembourg Euroclear/ Clearstream, Luxembourg Euroclear/ Clearstream, Luxembourg Euroclear/ Clearstream, Luxembourg Euroclear/ Clearstream, Luxembourg Minimum Denomination: A50,000 A50,000 A50,000 A50,000 A50,000 1 NE refers to Note EURIBOR as defined above. 6

8 STRUCTURE DIAGRAM Structure Diagram The structure diagram below is an indicative summary of the principal features of the transaction. The structure diagram must be read in conjunction with, and is qualified in its entirety by, the detailed information presented elsewhere in this Prospectus. Loan Pool Noteholders Note Trustee Issue of Notes Security Trustee Security First Active p.l.c. (as Originator and Servicer) Sale of Mortgages Celtic Residential Irish Mortgage Securitisation No. 12 Limited Cap Provider Swap Counterparty Mortgage Management Fee Subordinated Loan Mortgage Management and Agency Services GIC Sale of Mortgages (Refinanced Loans) GIC Provider Refinancing Sellers 7

9 SUMMARY INFORMATION The information set out below is a summary of the principal parties in respect of the issue of the Notes. This summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information presented elsewhere in this document. The Issuer The Originator/Seller The Refinancing Sellers The Servicer The Note Trustee and the Security Trustee The GIC Provider The Swap Counterparty Celtic Residential Irish Mortgage Securitisation No. 12 Limited is a private limited company incorporated in Ireland with registered number The authorised share capital of the Issuer comprises 100 ordinary shares of A1.00, two of which are fully paid up and held by Celtic Issuer Holdings Limited and its nominee, which in turn is owned by Deutsche International Finance (Ireland) Limited (in this capacity, the Share Trustee) and its nominee on discretionary trust for certain charitable institutions. First Active, whose principal place of business is at First Active House, Leopardstown, Dublin 18, Ireland. Celtic Residential Irish Mortgage Securitisation No. 3 p.l.c. with registered number (Celtic 3), Celtic Residential Irish Mortgage Securitisation No. 4 p.l.c. with registered number (Celtic 4), Celtic Residential Irish Mortgage Securitisation No. 5 p.l.c. with registered number (Celtic 5), Celtic Residential Irish Mortgage Securitisation No. 6 p.l.c. with registered number (Celtic 6 and together with Celtic 3, Celtic 4, Celtic 5, the Refinancing Sellers and each a Refinancing Seller). Each Refinancing Seller is a public limited company incorporated in Ireland. First Active (in this capacity, the Servicer) will manage and service the Loans and their related security. If the Servicer s appointment is terminated pursuant to the Mortgage Management and Agency Agreement, a substitute servicer approved by the Rating Agencies and the Security Trustee will perform such services. The Note Trustee will be Deutsche Trustee Company Limited, whose registered office is Winchester House, 1 Great Winchester Street, London EC2N 2DB. The Note Trustee will be appointed pursuant to a trust deed (the Trust Deed) to be entered into on the Closing Date between the Issuer and the Note Trustee to represent the interests of the holders of the Notes. The Security Trustee will be Deutsche Trustee Company Limited, whose registered office is Winchester House, 1 Great Winchester Street, London EC2N 2DB. The Security Trustee will hold the benefit of the security granted under the Deed of Charge (defined below) on behalf of the Secured Parties and will be entitled to enforce the security granted in its favour under the Deed of Charge in the circumstances described therein. On the Closing Date, Ulster Bank Ireland Limited, acting through its branch at 33 College Green, Dublin 2 (in this capacity, the GIC Provider) will provide the Issuer with a bank account (the GIC Account) pursuant to the terms of a guaranteed investment contract (the GIC) to be entered into on the Closing Date between the Issuer, the Security Trustee and the GIC Provider for the deposit of all collections and other monies from time to time received by the Issuer in respect of the Loans and their related security. See further Credit Structure Cash Collection Arrangements below. The swap counterparty on the Closing Date will be The Royal Bank of Scotland plc (in this capacity, the Swap Counterparty), acting through its office at 135 Bishopsgate, London EC2M 3UR. 8

10 The Cap Provider The Agent Bank and the Principal Paying Agent Irish Paying Agent The Corporate Services Provider In order to hedge the interest rate and basis risk associated with the Loans, the Swap Counterparty will enter into Interest Rate Swap Transactions (as defined in Condition 19 (Definitions)) pursuant to the Interest Rate Swap Agreement (as defined in Condition 19 (Definitions)). The cap provider on the Closing Date will be The Royal Bank of Scotland plc (in this capacity, the Cap Provider), acting through its office at 135 Bishopsgate, London EC2M 3UR. In order to hedge against the risk that interest rates increase such that Borrowers default rates increase, the Cap Provider will enter into the Interest Rate Cap (as defined in 19 (Definitions)) pursuant to the Cap Agreement (as defined in 19 (Definitions)). The Agent Bank and the Principal Paying Agent will be Deutsche Bank AG, London branch, of Winchester House, 1 Great Winchester Street, London EC2N 2DB. The Agent Bank, the Principal Paying Agent, the Note Trustee and the Issuer will on the Closing Date enter into an agency agreement (the Agency Agreement). Ulster Bank Ireland Limited, whose principal place of business is Ulster Bank Group Centre, George s Quay, Dublin 2. The corporate services provider will be Deutsche International Corporate Services (Ireland) Limited whose registered office is at 5 Harbourmaster Place, International Financial Services Centre, Dublin 1 (Corporate Services Provider). On the Closing Date, the Corporate Services Provider, the Note Trustee and the Issuer will enter into a corporate services agreement (Corporate Services Agreement). 9

11 SUMMARY OF TERMS AND CONDITIONS OF THE NOTES The information set out below is a summary of the principal features of the issue of the Notes. This summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information presented elsewhere in this document. Status, form and denomination Each class of Notes will be constituted by the Trust Deed and each class of Notes will be secured by the same security. In respect of interest due and payable on the Class A Notes, the Class A Notes will rank pari passu and rateably without preference or priority among themselves. In respect of principal amounts due on the Class A Notes, the Class A1 Notes rank senior to the Class A2 Notes and the Class A3 Notes prior to service of an Enforcement Notice as provided in the Conditions and the Transaction Documents, and the Class A2 Notes rank senior to the Class A3 Notes prior to the service of an Enforcement Notice as provided in the Conditions and the Transaction Documents. With respect to the payment of principal and interest, the Class B Notes rank pari passu without preference or priority amongst themselves but junior to the Class A Notes as provided in the Conditions and the Transaction Documents. With respect to the payment of principal and interest, the Class C Notes rank pari passu without preference or priority amongst themselves but junior to the Class A Notes and the Class B Notes as provided in the Conditions and the Transaction Documents. The Trust Deed and the Deed of Charge contain provisions requiring the Note Trustee and the Security Trustee, respectively, to have regard to the interests of the holders for the time being of the Class A Notes (the Class A Noteholders), the holders for the time being of the Class B Notes (the Class B Noteholders), the holders for the time being of the Class C Notes (the Class C Noteholders, and, together with the Class A Noteholders and the Class B Noteholders, the Noteholders) as if they formed a single class, but, where there is, in the Note Trustee s opinion, or as the case may be the Security Trustee s opinion, a conflict between such interests, the Trust Deed and the Deed of Charge requires the Note Trustee and the Security Trustee, respectively, to have regard, (i) as between the holders for the time being of the Class A Notes, the Class B Notes and the Class C Notes, to the interests of the Class A Noteholders only; and (ii) subject to (i), as between the holders for the time being of the Class B Notes and the Class C Notes, to the interests of the Class B Noteholders only. The Note Trustee and/or the Security Trustee will not have regard to the interests of any specific class of Noteholders within the Class A Notes. The Trust Deed contains provisions limiting the powers of the Class B Noteholders, inter alia, to pass any Extraordinary Resolution or to request or direct the Note Trustee or the Security Trustee to take any action which may affect the interests of the Class A Noteholders. The Trust Deed contains provisions limiting the powers of the Class C Noteholders, inter alia, to pass any Extraordinary Resolution or to request or direct the Note Trustee or the Security Trustee to take any action which may affect the interests of the Class A Noteholders and/or the Class B Noteholders. The Trust Deed contains provisions to the effect that the Class A Noteholders or, if none of the Class A Notes remain outstanding, the Class B Noteholders or, if none of the Class B Notes remain outstanding, the Class C Noteholders shall have the power to remove any Note Trustee or Security Trustee and shall have the power to approve any appointment of a new Note Trustee or Security Trustee as proposed by the Issuer. The Notes will be obligations of the Issuer only and will not be guaranteed by, or be the responsibility of, any person other than the Issuer. In particular, the Notes will not be obligations or responsibilities of, or guaranteed by, the Note Trustee, the Security Trustee, the Managers, the GIC Provider, the Swap Counterparty, the Cap Provider, the Servicer, the Agent Bank, the Paying Agents, First Active or any company in the same group of companies as, or affiliated to, First Active. Each of the Notes (which will be in denominations of A50,000 and integral multiples of A1,000), will initially be represented by a single Temporary Global Note for that class. Interests in each Temporary Global Note will, upon certification as to non-us beneficial ownership, be exchangeable, subject as provided under Global Notes below, for interests in a Permanent Global Note for that class on and after the date which is 40 days after the Closing Date. The Permanent Global Notes of each class will not be exchangeable for definitive Notes of that class save in certain limited circumstances (see further Terms and Conditions of the Notes below). 10

12 Interest Interest on the Notes is payable by reference to successive interest periods (each, an Interest Period) and will be payable in arrear in euro and in respect of the Principal Amount Outstanding (as defined in Condition 6.6 of each class of Notes) on the eighteenth day of March, June, September and December in each year (unless such day is not a day on which commercial banks and foreign exchange markets settle payments in London and Dublin or is not a TARGET Business Day (a Business Day), in which case interest will be payable on the next such day) (each such day being an Interest Payment Date). The first Interest Period will commence on (and include) the Closing Date and end on (but exclude) the Interest Payment Date falling in September Each successive Interest Period will commence on (and include) an Interest Payment Date and end on (but exclude) the next Interest Payment Date. Interest on the Notes will be payable at an annual rate equal to the sum of Note EURIBOR plus a margin according to the following: Class of Notes Initial Margin (per annum up to and including the Step Up Date) Step Up Margin (per annum thereafter) A1 0.05% 0.10% A2 0.08% 0.16% A3 0.10% 0.20% B 0.16% 0.32% C 0.50% 1.00% Withholding tax Payments of interest and principal will be made subject to any applicable withholding or deduction for or on account of any tax and neither the Issuer nor the Paying Agents will be obliged to pay any additional amounts as a consequence. Final redemption Unless previously redeemed in full, each class of Notes will mature at its Principal Amount Outstanding on the Interest Payment Date falling in March 2049 together with accrued but unpaid interest thereon. Mandatory redemption Each Note shall, subject to Condition 6.3 (Optional redemption) and 6.5 (Optional redemption for taxation or other reasons), be repaid on each Interest Payment Date from the Available Redemption Funds, after payment, or provision for, amounts ranking in priority to the relevant Note in accordance with the terms of the Deed of Charge. It is not intended to maintain surplus Available Redemption Funds, other than amounts credited to the Liquidity Reserve Fund (if established) in the Issuer. Subject to the terms of the Deed of Charge, prior to the occurrence of a Pro-Rata Trigger Event and prior to the enforcement of the Security under the Deed of Charge, Available Redemption Funds will be applied to repay the Notes sequentially in the following order of priority: (i) first, in or towards repayment pro rata and pari passu of the Class A1 Notes; (ii) second, in or towards repayment pro rata and pari passu of the Class A2 Notes; (iii) third, in or toward repayment pro rata and pari passu of the Class A3 Notes; (iv) fourth, in or towards repayment pro rata and pari passu of the Class B Notes; and (v) fifth, in or towards repayment pro rata and pari passu of the Class C Notes. Subject to the terms of the Deed of Charge, on or following the occurrence of a Pro-Rata Trigger Event but prior to the service of an Enforcement Notice and provided that the circumstances giving rise to a Pro-Rata Trigger Event continue to exist, Available Redemption Funds will be allocated and applied to repay the Class A Notes, the Class B Notes and the Class C Notes on a pro-rata and pari passu basis on the basis of their then Principal Amount Outstanding. Any pro rata amount allocated to repay the Class A Notes shall be applied firstly towards repayment (on a pro rata and pari passu basis) of the Class A1 Notes until they are repaid in full, then towards repayment (on a pro rata and 11

13 pari passu basis) of the Class A2 Notes until they are repaid in full and then towards repayment (on a pro rata and pari passu basis) of the Class A3 Notes. If the circumstances giving rise to the occurrence of a Pro-Rata Trigger Event cease to exist, then Available Redemption Funds will be applied on the following Interest Payment Date in accordance with the Pre-Enforcement Sequential Redemption Priority of Payments. Optional redemption (a) On giving not more than 60 nor less than 15 days notice to the Noteholders, in accordance with Condition 14 (Notice to Noteholders), and the Note Trustee, and provided that: (i) on or prior to the Interest Payment Date on which such notice expires, no Enforcement Notice has been served; and (ii) the Issuer has, immediately prior to giving such notice, certified to the Note Trustee that it will have the necessary funds to pay all principal and interest due in respect of the Notes on the relevant Interest Payment Date and to discharge all other amounts required to be paid in priority to or pari passu with the Notes on such Interest Payment Date; and (iii) the date of redemption will be on any Interest Payment Date from and including the Step- Up Date or any Interest Payment Date on which the aggregate Principal Amount Outstanding of the Notes then outstanding will be less than 10% of the aggregate Principal Amount Outstanding of the Notes on the Closing Date, the Issuer may redeem on such Interest Payment Date all (but not some only) of the Notes. (b) Subject as provided below, the Issuer shall, on exercise of its option to redeem pursuant to Condition 6.3(a), redeem Notes in the following order: (i) first, the Class A1 Notes pro rata; (ii) secondly, the Class A2 Notes pro rata; (iii) thirdly, the Class A3 Notes pro rata; (iv) fourthly, the Class B Notes pro rata; and (v) fifthly, the Class C Notes pro rata. The Notes to be redeemed will be selected in accordance with the rules and procedures of the relevant Clearing Systems (to be reflected in the records of the Clearing Systems as either a pool factor or a reduction in the nominal amount, at their discretion). (c) Any Note redeemed pursuant to Condition 6.3(a) will be redeemed at an amount equal to the Principal Amount Outstanding of the relevant Note together with, in each case, accrued and unpaid interest on the Principal Amount Outstanding of the relevant Note up to (but excluding) the date of redemption. Special Redemption On the Closing Date, the Issuer will apply proceeds of the Notes to purchase from First Active loans having a principal amount outstanding, as at 24 May 2007 (the Cut-Off Date), of A1,546,087,806 (the Initial Loans). The balance of the net proceeds of the Notes, A403,912,194, will be deposited into the GIC Account in the name of the Issuer and will be recorded in the Refinanced Loans Ledger (as defined below). On the Refinance Closing Date, subject to the satisfaction of certain conditions, the Issuer will apply such moneys credited to the GIC Account and recorded in the Refinanced Loans Ledger as are necessary to purchase from the Refinancing Sellers loans beneficially owned by the Refinancing Sellers which are financed pursuant to the terms of the Existing Securitisations (as defined in The Loans below) having a principal amount outstanding, as of 31 May 2007, of A398,632,989 (the Refinanced Loans). Any amount standing to the credit of the GIC Account and recorded in the Refinanced Loans Ledger after application of the moneys used to purchase the Refinanced Loans will be transferred to the Principal Ledger and will form part of Available Redemption Funds. If, by 31 July 2007, some or all of the Refinanced Loans have not been sold by the Refinancing Sellers to the Issuer pursuant to a mortgage sale agreement to be dated the Closing Date between the Refinancing Sellers, the Issuer, First Active, and the Security Trustee (the Refinancing Mortgage Sale Agreement) (because, for example, the conditions to completion of such sale and purchase have not been satisfied), an early mandatory redemption payment in an amount equal to the Special Redemption Amount (as defined in Condition 6.4) shall be applied to each Note and a special 12

14 redemption (a Special Redemption) will occur three Business Days thereafter (the Special Redemption Date). The Special Redemption Amount in respect of each class of Notes shall be, in respect of each Note within that Class, a pro rata amount of the Principal Amount Outstanding of that Note together (to the extent that the Issuer has funds available for such purpose) with accrued but unpaid interest from, and including, the Closing Date up to, but excluding, the Special Redemption Date. The Issuer shall fund the Special Redemption Amount in full on the Special Redemption Date out of the moneys standing at that time to the credit of the GIC Account and recorded in the Refinanced Loans Ledger. Amounts of accrued but unpaid interest shall be funded from interest earned on the GIC Account and from the Issuer s other sources of income, to the extent available. Redemption for tax reasons In the event of certain changes in tax law (or the application or official interpretation thereof) affecting the Notes and/or the Interest Rate Swap Agreement and/or the Cap Agreement, including in the event that (i) the Issuer is or will be obliged to make any withholding or deduction from payments in respect of the Notes and/or (ii) either the Issuer, the Swap Counterparty or the Cap Provider is or will be obliged to make any withholding or deduction from payments it makes under the Interest Rate Swap Agreement or the Cap Agreement (as applicable), although the Issuer will not have any obligation to pay additional amounts in respect of any such withholding or deduction, the Issuer is entitled to (but is not obliged to) redeem all (but not some only) of the Notes at their Principal Amount Outstanding together with accrued but unpaid interest thereon up to and including the date of repayment, subject to and in accordance with the provisions set out in Condition 6.5. No class of Notes may be redeemed under such circumstances unless the other classes of Notes (or such of them as are then outstanding) are also redeemed in full at the same time. Ratings It is expected that the Class A1 Notes, the Class A2 Notes and the Class A3 Notes, when issued, will be assigned an AAA rating by S&P and an Aaa rating by Moody s. It is expected that the Class B Notes, when issued, will be assigned an AA rating by S&P and an Aa3 rating by Moody s. It is expected that the Class C Notes, when issued, will be assigned an BBB rating by S&P and an Baa2 rating by Moody s. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the Rating Agencies. Any reference to matters approved by the Rating Agencies refers to confirmation that the proposed action would not cause the downgrading or the withdrawal of the then current rating of the Notes or the Notes to be put on negative watch. Listing Application has been made to the Irish Stock Exchange for the Notes to be admitted to its Official List and to trading on its regulated market. Governing law The Notes (including the Global Notes) will be governed by English law. Purchases The Issuer is not permitted to purchase Notes. Security and application of funds Pursuant to a deed of charge and assignment (the Deed of Charge) to be entered into on the Closing Date by, inter alios, the Issuer, the Security Trustee, the Principal Paying Agent, the Irish Paying Agent and any other paying agent (together with the Principal Paying Agent and the Irish Paying Agent, the Paying Agents), the Notes, together with other obligations of the Issuer, will be secured by, inter alia, a first ranking fixed charge over the Loans and their related security and all other interests sold or agreed to be sold to the Issuer pursuant to (a) a mortgage sale agreement to be entered into on the Closing Date by the Issuer, First Active and the Security Trustee (the Mortgage Sale Agreement) and (b) the Refinancing Mortgage Sale Agreement, an assignment by way of security of the Issuer s rights and benefits under certain agreements relating to the transaction and a first ranking fixed charge over the Issuer s interest in the GIC Account, any authorised investments, any collateral account established pursuant to the Credit Support Annex relating to the Interest Rate 13

15 Swap Agreement and/or the Cap Agreement. In addition, subject as mentioned above, the Notes will be secured by a first ranking floating charge over all of the property, assets and undertakings of the Issuer not subject to any fixed charge (together with the other security interests described above, the Security). Loans All of the Loans to be purchased by the Issuer from First Active and from the Refinancing Sellers will consist of variable or fixed rate loans that meet certain lending criteria. See further the section entitled The Loans for a description of the loan products to be purchased by the Issuer on the Closing Date and the Refinance Closing Date. All of the Loans were originated by First Active and are secured by way of first fixed legal mortgages over residential properties situated in Ireland. Each of the Loans and related mortgages is governed by Irish law. First Active may agree to convert Loans into other loan products. If First Active agrees to a request by a Borrower to convert his or her Loan into any type of loan which does not meet the applicable conditions (as set out in The Loans Conversion of Loans below), the Issuer will be obliged as soon as practicable to sell to a third party all of its right, title and interest in such Loan and its related security for a price no less than the outstanding principal balance of such Loan together with any arrears and accrued but unpaid interest thereon unless the Rating Agencies have confirmed that as a consequence of the conversion the then current rating applicable to the Notes will not be downgraded or withdrawn and that the Notes will not be put on negative watch. The Security Trustee and the Issuer will have the benefit of Warranties given by First Active and the Refinancing Sellers in relation to the Loans and their related security, including warranties in relation to the lending criteria applied in advancing the Loans. The Loan Pool from time to time will comprise (i) the Initial Loans, (ii) from the Refinance Closing Date, the Refinanced Loans (subject to the satisfaction of certain conditions), (iii) any Converted Loan, (iv) any Mortgage Master Advances, and (v) any Loans which are the subject of Further Advances, but will exclude Loans which have been repaid in full or which have been repurchased by First Active following a breach of a Warranty. The Refinance Closing Date is the date on which the Issuer purchases the Refinanced Loans from the Refinancing Sellers pursuant to the terms of the Refinancing Mortgage Sale Agreement. 14

16 RISK FACTORS The following is a summary of certain aspects of the issue of the Notes about which prospective Noteholders should be aware. The summary is not intended to be exhaustive and prospective Noteholders should read the detailed information set out in the section entitled Credit Structure and elsewhere in this document. The Issuer s ability to meet its obligations under the Notes The ability of the Issuer to meet its obligations in full in respect of payments of interest and principal on the Notes, including following the occurrence of any event of default by the Issuer (an Event of Default as set out in Condition 9), will depend upon and is limited to (i) the receipt by it of funds, through the Servicer, from Borrowers in respect of their Loans and their related security, (ii) the receipt by it of interest on the GIC Account or otherwise from certain authorised investments and (iii) the receipt by it of funds from the Swap Counterparty under the Interest Rate Swap Agreement and the Cap Provider under the Cap Agreement. In addition, the Issuer will have available to it the Liquidity Reserve Fund (if established) and the Reserve Fund for the purposes specified in Credit Structure below. On enforcement of the security under the Deed of Charge, the obligation of the Issuer to repay monies due and owing to the Noteholders will depend upon whether the Loans and their related security can be realised to obtain an amount sufficient to effect repayment thereof. It should be noted that there is no recognised secondary market in Ireland for the sale of loan portfolios. From the net proceeds of the issue of the Notes, A403,912,194 will be held in the GIC Account in the name of the Issuer and will be recorded in the Refinanced Loans Ledger (as defined below). The rights of the Issuer in respect of such moneys will be assigned by way of first fixed security in favour of the Security Trustee. If, by 31 July 2007 the Refinanced Loans have not been sold by the Refinancing Sellers to the Issuer, the Special Redemption of the Notes will occur, utilising the sums standing to the credit of the GIC Account and recorded in the Refinanced Loans Ledger. Even though Noteholders will, in these circumstances, receive the Special Redemption Amount, there may nevertheless be a loss of investment opportunity to Noteholders. Collectability of Loans The collectability of amounts due under the Loans and their related security is subject to credit, liquidity and interest rate risks and will generally fluctuate in response to, among other things, market interest rates, general economic conditions, the financial standing of Borrowers and other similar factors. Other factors (which may not affect real estate values) may have an impact on the ability of Borrowers to repay Loans. Loss of earnings, illness, divorce and other similar factors may lead to an increase in delinquencies and bankruptcy filings by Borrowers and could ultimately have an adverse impact on the ability of Borrowers to repay Loans. In addition, the ability of the Issuer to dispose of a property at a price sufficient to repay the amounts outstanding under a Loan will depend upon the availability of buyers for the property. Risks of losses associated with declining property values The Security for the Notes consists of, inter alia, the Issuer s interest in the Loans and their related security. This security may be affected by, among other things, a decline in property values. No assurance can be given that values of the properties have remained or will remain at the level at which they were on the dates of origination of the related Loans. If the residential property market in Ireland should experience an overall decline in property values, such a decline could, in certain circumstances, result in the value of the security created by the Loans being significantly reduced and, ultimately, may result in losses to the Noteholders if the security is required to be enforced. As of the Provisional Loan Pool Date, 11.87% of the Loan Pool by value consists of Loans for which the LTV (as defined in The Loans below) was greater than 95% and thus the risk of loss associated with declining property values will be more significant with respect to such Loans. Geographic concentration of mortgaged properties Certain geographic regions in Ireland will from time to time experience weaker regional economic conditions and housing markets than will other regions and, consequently, will experience higher rates of loss and delinquency on loans generally. There are concentrations of properties within certain regional areas which may present risk considerations in addition to those generally present for similar 15